“8. The Oligarchs” in “The Coalitions Presidents Make”
8 THE OLIGARCHS
Thus far, this book has analyzed members of presidential coalitions with legal-institutional powers as their main political leverage. Like presidents, they have strong rights and privileges anchored in law or the constitution that allow them to negotiate their place in coalitional presidentialism. Parties, for instance, hold the nomination rights for presidential candidacies; legislators approve budgets and laws, and are involved in key appointments; the military and police control the monopoly of violence; bureaucrats have the exclusive right of policy implementation; and local government heads are legally charged with delivering public services on the ground and spending a significant percentage of the state budget in the process. To entice these state-anchored actors to use their powers in a way that does not collide with the president’s interests, heads of state see the need to integrate them into their coalitions through a combination of concessions and threats. There are also actors, however, that are not equipped with legal-institutional authority but exercise immense power. Indeed, some of them are not even mentioned in laws and much less given any specific privileges by them. In the two remaining core chapters, we turn to two such actors that have figured prominently in presidential coalitions: first, the oligarchs, who are accommodated by presidents because of their wealth and their role in managing the economy; and second, influential Muslim mass organizations, which are essential sources of religio-political legitimacy for incumbent presidents and those who aspire to occupy this post.
When assessing the role of oligarchs in presidential coalitions, it is important to begin by defining who an oligarch is—and who is not. This book defines oligarchs as actors whose primary instrument of exercising political influence is their directly controlled, personal wealth. Thus, it does not share the broad, classic definition (derived from its Greek origins) of oligarchs as an exclusive clique of people governing a polity. Such a definition has been used to describe, for instance, the men ruling Meiji Japan, although wealth was not their main source of power (Beckmann 1957). Subsequently, the discussion of oligarchy shifted gradually to focus on wealth, but the exact definitional boundaries have often remained blurred. This also applies to the use of the terms “oligarchy” and “oligarchs” in the context of post-Suharto Indonesia. Hadiz and Robison (2004), for example, defined oligarchy as a system and shied away from defining what exactly an oligarch is—presumably because, in Marxist tradition, they view this system as affecting everyone who operates within it. Winters (2011), by contrast, delivered a precise definition of oligarchs, but he included figures who have access to, as opposed to direct control of, wealth. This opens the door to the inclusion of political leaders who can call on favors from rich entrepreneurs, or who have obtained some wealth as a result of, rather than as a condition for, getting involved in politics. Instead, the definition used by this book focuses on actors who would not have the political influence they possess if it were not for their wealth. It excludes those who have other primary resources of political power, even if they become affluent through them.
To illustrate what the application of this definition means in practice, it is useful to explain it with the help of examples. Based on this book’s definition, a figure such as Akbar Tandjung, the former head of Golkar and chairman of the DPR (1999–2004), is not considered an oligarch. That is despite the affluence he acquired in his political career, which began under Suharto’s regime. According to Winters, Tandjung was an oligarch who eventually lost out to an oligarch with larger resources (Jusuf Kalla)—the latter, as vice president, replaced the former as Golkar leader in December 2004. But in deploying his definition, Winter appears doubtful about whether Tandjung truly was an oligarch. At the beginning of Winters’s discussion, Akbar is called a full “pribumi [indigenous Indonesian] oligarch” (Winters 2011, 182). Later, Akbar is first downgraded to a “middle oligarch” (187) and ultimately to a “minor oligarch” (189). But if oligarchs are defined as actors whose primary source of power is direct, personal wealth, Tandjung is not an oligarch at all. Rather, he is best understood as a politician who used his primary political resource (connections in politics and mass organizations) to exert influence and add to his private wealth. Figures such as Megawati and Yudhoyono are also in this category. As tempting as it may be to subsume most Indonesian leaders into a “broader array of oligarchic elites” (Fukuoka and Djani 2016, 213), this approach obstructs the analytical view of those who weaponize their wealth for political purposes. We already encountered members of this oligarchic class in this book: Surya Paloh, for instance, or Hari Tanoesoedibjo, both chairpersons of parties in Widodo’s coalition.
Although this book uses a narrower definition of the term “oligarch” than others, this does not mean that its application is easy and unproblematic. For instance, it is impossible to quantify the wealth threshold after which an actor is classified as an oligarch; wealth reports and estimates in Indonesia are notoriously unreliable and can only hint at the true wealth possessed. In consequence, although this book uses available quantitative data to assess an actor’s oligarchic status, data alone are not definitive in this regard—a person’s background and career are also evaluated. Furthermore, classifying an actor as an oligarch does not preclude that this person has talents, knowledge, and expertise that qualify him or her for a position of political power and responsibility. However, in a patronage-driven society like Indonesia’s, it is unfeasible to withhold the categorization of “oligarch” from persons of extraordinary wealth who claim that the latter played no role in their appointment to a post of political influence. Many such oligarchs have obtained positions that allowed them to make policy in the business areas in which they concurrently have had private commercial interests. In such a constellation, even allegedly good intentions do not change the fact that a person who possesses large amounts of private capital and obtains public office as a result is part of a group that is more likely than not to reproduce the socio-economic conditions under which this wealth is increased or at least protected.
With these definitions and qualifications in mind, this chapter discusses how oligarchs have become members of presidential coalitions. This has occurred through direct membership of cabinet; the chairing of political parties; leadership positions in lobby groups; the financing of politics in general and presidential expenditures in particular; and more subtle forms of indirect influencing. The first section highlights the powers of oligarchs vis-à-vis the presidency. It focuses on the wealth of oligarchs and presidents’ dependence on it but also examines how oligarchs—through their role in the economy—are key to macroeconomic stability. In the second section, we look at the authority of presidents that oligarchs fear and would like to draw from. This includes the president’s control of state contracts and regulatory frameworks that are crucial for the existence of oligarchs and their enterprises. The third section explores the mechanisms of cooperation between the two sides, with coalitional presidentialism offering an effective framework for their interdependence. In the final section, a case study of Aburizal Bakrie, the former Golkar chair and minister, offers valuable insights into the extent and limitations of oligarchic power when dealing with presidents. On the one hand, Bakrie’s wealth allowed him, an unpopular and uncharismatic politician, to penetrate the most exclusive circles of political power. On the other hand, his wealth did not protect him from being excluded from this circle once he had decided to confront the president. Accordingly, Bakrie’s case tells the story of how oligarchs become members of presidential coalitions—and how presidents can withdraw this membership.
Oligarchic Power
In any political system, wealthy actors enjoy privileged access to the political infrastructure (Winters and Page 2009). Dictators and democratic leaders alike need money to fund their operations and must grant significant concessions in return. Arguably, the power of the wealthy is even more consequential in democratic systems, as the costs associated with electoral campaigning put a premium on the provision of funds to parties and candidates, and hence on those who can deliver them. In democracies, oligarchs can exert influence by becoming donors to state leaders, both legally and illicitly; turning into political actors themselves by shouldering the cost of creating new parties; establishing lobby groups; paying for advertising campaigns, or even buying media outlets that run such campaigns; entrenching large patronage networks that influence politicians dependent on funds; and funding activities that can assist some power holders or oppose others. Not coincidentally, some populist leaders running campaigns in democratic systems since the beginning of the twenty-first century have been oligarchs—Thaksin Shinawatra in Thailand, Donald Trump in the United States, and Andrej Babiš in the Czech Republic are prominent examples of this trend. Moreover, oligarchs have made it to the top even without becoming populists, such as in the case of Sebastián Piñera of Chile. In Indonesia, the populist Prabowo Subianto established a party with the wealth of his tycoon brother and ran expensive presidential campaigns paid for by oligarchic running mates (Aspinall 2015). Although unsuccessful in 2014 and 2019, his political career is far from over.
For many reasons, Indonesia’s political system remains especially vulnerable to oligarchic power (Fukuoka 2013). Despite a quarter of a century of democratization, Indonesia is still a patronage-oriented polity and society in which few institutions work without extra money being paid to persons of authority to deliver a service. Related to this, Indonesia has also done little to build correctives against oligarchic influence into its party and electoral system. Unlike other democratic systems that introduced public party and campaign funding to reduce the influence of external sponsors, Indonesia provides little state funding to its political actors (Mietzner 2015). Presidential candidates receive no assistance, and parties get only a fraction of the real expenditure covered. Indeed, the amount national parties receive annually per vote obtained in the last election was reduced from US 10 cents to 1 cent in 2005, before being raised again to 10 cents in 2017. Additional funding is available for regional chapters, but far from enough to significantly contribute to the management of complex party chapters in a nation of 275 million people. A 2016 study by the KPK estimated that only around 4 percent of parties’ operational costs (not including campaign expenses) were covered by state subsidies (Amalia 2016). In this context, oligarchs often appear as the only option for cash-strapped parties and candidates, who turn to them for one-time support or long-term involvement (the latter can even lead to an oligarch taking over the party). In return, parties and candidates promise to defend the sponsor’s interest when in power.
Presidents or presidential candidates are particularly reliant on oligarchic support as the size of the Indonesian archipelago makes effective campaigning prohibitively expensive. The magnitude of national campaigns forces presidential aspirants to rely on party networks—but it also requires accessing large funds only top oligarchs can deliver. This is because the absence of a functioning public financing system is aggravated by a lacking tradition of small-scale donations. Few Indonesians donate to parties and candidates; on the contrary, many expect material compensation for their votes (Muhtadi 2019). Even during the exceptional election of 2014, when Widodo appeared to symbolize the rise of an ordinary man fighting the vested interests of the rich elite, only 59,000 citizens donated Rp 43 billion (US$3 million) to his campaign (Anwar 2014). By comparison, small donors gave Joe Biden US$368 million in 2020, or 38 percent of the donations received (Gratzinger 2020). Widodo’s 2019 campaign suspended any systematic attempt to raise money from small donors: only Rp 21 billion was raised from a mere 252 donors (Jawa Pos 2019). In total, the Widodo campaign reported donations of Rp 606 billion (US$43 million), which is likely to be only a small part of the actual amount received and spent. In such campaigns, the bulk of the funds is typically provided by oligarchs who prefer to give off-the-books donations. In doing so, they wish to avoid inquiries by the tax office about the true extent of their wealth and to obscure the circumstance that they not only donated to the winner but to all sides.
Indonesia’s political system hands extraordinary power to the wealthy by limiting the ability of non-oligarchic actors to form new parties. Some oligarchs have taken over existing parties (Golkar, for instance, has seen a succession of oligarchic chairmen since 2004). Although numerous parties led by non-oligarchic chairpersons still exist, new entries to the party system have been almost exclusively oligarchic. This is because the establishment requirements for political parties have been raised over time. In 1999, parties had to have branches in half of the provinces and half of the districts of those provinces.1 By the 2014 elections, this requirement had increased to 100 percent in provinces, 75 percent in districts, and 50 percent in sub-districts. Concretely, this meant a massive increase in the costs needed to establish a new party. At the same time, the elite reduced the chances of a new party succeeding by raising the parliamentary threshold from 2.5 percent in 2009 to 3.5 percent in 2014 and 4 percent in 2019. This presented a cost-benefit calculus that only oligarchs could take on. Consequently, all four new parties running in the 2019 elections had oligarchic chairmen or backers: media tycoon Hary Tanoesoedibyo’s Perindo; Berkarya, the party chaired by Suharto’s son Tommy; PSI, a quasi-liberal party sponsored by a reformist oligarch; and an obscure party also believed to have been funded by Suharto-linked interests. Tellingly, none of these parties made it into national parliament, further highlighting the near-impenetrability of the existing party system.
Hence, oligarchs have made significant inroads into Indonesia’s electoral landscape as donors, party sponsors, and direct political actors. But the power of oligarchs extends well beyond the electoral arena. When in office, Indonesian presidents invariably need funds for political operations: paying for events involving supporters, handing out favors, topping up salaries for their staff, and so forth. Presidents can access state funds for some of these costs, but others need to be paid for by non-state sources. This is when oligarchs offer their services by making payments at the direction of their patrons. They also provide in-kind services, such as private planes, that only the wealthy can afford. Said one politician, “experienced political leaders don’t collect cash from oligarchs and hide it in some bank account. That’s very antiquated. What really counts is the ability to make a call to an oligarch and ask them whether they can pay for a congress of party A, give a scholarship to the kid of minister B, or lend a plane to delegation C. Of course, once the leader does that, he or she becomes entangled in the web of financial power possessed by those who provide the services” (confidential interview, Jakarta, December 5, 2019). As another politician put it, “oligarchs are the credit cards of presidents and other leaders. Some may feel sorry for the oligarchs. But in reality, they love fulfilling this function because the use of their money is what gives them power over who uses it” (confidential interview, Jakarta, September 10, 2018).
Oligarchs have also amassed much power in the political arena by controlling large media empires (Tapsell 2017). Hari Tanoesoedibjo, for instance, heads a conglomerate that in 2017 included “three free-to-air national television networks that command some 40 percent of prime-time audience share” (Suzuki 2017). These media companies not only greatly influence election outcomes but are also decisive in sustaining a president’s popularity in between ballots. Accordingly, presidents and other politicians who wish to gain access to the media instruments owned by oligarchs need to find ways to entice them to grant this access. As will be shown in more detail later, presidents have successfully done so by pulling media-owning oligarchs into their coalitions through threats and offers of political, material, and policy-related privileges.
Outside of active politics, oligarchs play an important role as business practitioners. Business decisions made by oligarchs can support or weaken the stability of the national economy; this stability, in turn, is essential for presidents if they want to avoid social upheaval. Suharto, for instance, saw both domestic oligarchs and international investors abandoning him in 1998, which destabilized the polity so much that it became unsalvageable (Pepinsky 2009). Suharto and his aides openly blamed ethnic Indonesian Chinese oligarchs—whose money he had previously accepted to distribute patronage—for the country’s trouble (Cohen 1998). Similarly, under democratic rule, successive presidents have appealed to oligarchs to repatriate their overseas funds, parked there for security and commercial reasons. Widodo tried to achieve repatriation through a tax amnesty in 2015, but the subsequent inflow of funds was widely viewed as disappointing (only some Rp. 136 trillion, or US$9.7 billion, were repatriated).2 Oligarchs are also some of Indonesia’s largest employers, responsible for workers’ welfare and productivity. How they pay, treat, and train their workers has strong implications for the political satisfaction of the citizenry. Polling experts have long pointed to the close relationship between a citizen’s assessment of the condition of the economy and their economic well-being, on the one hand, and satisfaction with the president, on the other (Mujani, Liddle, and Ambardi 2018). Oligarchs, then, are major determinants of politico-economic outcomes.
Oligarchs have powerful lobby groups to channel their interests as a collective. The Indonesian Chamber of Industry and Trade (Kadin) is chief among them. The Chamber represents the views of the business sector and its actors vis-à-vis the government and often deals directly with the president. Its power is so substantial that presidents have sought to place loyalists at its helm to mitigate its potential to damage the government. In July 2021, Widodo engineered the election of a pro-government entrepreneur as Kadin chairman (Taher 2021), mostly to thwart the candidacy of Anindya Bakrie, the son of Aburizal. In addition to Kadin, there is the Indonesian Association of Young Entrepreneurs (HIPMI), whose members often go on to hold key positions in Kadin, the government, or parties. Airlangga Hartarto, a businessman and HIPMI functionary, became chairman of Golkar in 2018, and Sandiago Uno, a HIPMI chairman between 2005 and 2008, ran for the vice presidency in 2019 and then joined cabinet. While ethnically indigenous Indonesians dominate Kadin and HIPMI, this is not the case with the Indonesian Association of Entrepreneurs (Apindo). A cross-ethnic lobby group for oligarchs, it has significant ethnic Chinese representation. Between 2003 and 2014, its chair was Sofjan Wanandi, an ethnic Chinese oligarch with wide connections in the political arena. In short, whereas oligarchs as individuals seek to maneuver themselves into advantageous positions by aligning with (and funding) the right political protégés, they also exercise a level of power as a group that no president can ignore.
In brief, although oligarchs have no official position in Indonesia’s constitutional framework, they can mobilize powers that put them on par with some of Indonesia’s primary political protagonists. They function as the main generator of patronage resources that fuel the operations of the polity, ranging from elections, political mobilization, media coverage, and organizational activities. Substituting more formal means of funding politics, oligarchs make themselves indispensable to various actors, the president among them. Moreover, the oligarchs’ lobby groups have a political clout similar to that of parties, and thus expect the same attention from the president when power is distributed. It would be wrong to assume, however, that oligarchs are the all-powerful rulers of the post-1998 democracy, as some of the proponents of the oligarchy theory in Indonesia appear to suggest. Despite their influence, oligarchs have to accept, manage, and accommodate the interests and powers of leading political institutions, including the presidency. Presidents, therefore, are not mere instruments of oligarchs, and as the next section demonstrates, have an arsenal of tools available to them to counter oligarchic influence.
Presidential Power and Oligarchs
Presidents possess regulatory, constitutional, and political powers over oligarchs. To begin with, the regulatory arena is of great importance in this regard. Most oligarchs in Indonesia lead business conglomerates reaching into numerous commercial fields, at least some of which are highly dependent on government regulation (the term konglomerat in Indonesian is a synonym for oligarch). For instance, many oligarchs are heavily invested in the natural resource sector, which the national government regulates through the issuing of licenses, export quotas, revenue sharing stipulations, and environmental rules. Many of the country’s oligarchs have become wealthy by receiving licenses for coal, gold, oil, gas, and other minerals, and used this wealth to branch out into other business sectors. Luhut Pandjaitan, who launched his post-military business career in 2004 by establishing the Toba Sejahtera Group, started with coal mining, oil, gas, and palm oil projects before becoming active in the power plant business. (As noted, Luhut later turned into Widodo’s closest aide, highlighting the interest that oligarchs have in being close to presidential power.) Similarly, tycoons whose key business is in the media sector depend on government regulations that determine where TV stations can be located, who gets a license and who does not, and so forth (Tapsell 2017). For example, after the television and newspaper oligarch Surya Paloh joined government with his Nasdem party, he had direct access to the president and his institutional authority to regulate the media sector.
Traditionally, the Indonesian state has been a leading actor in the economy, giving presidents crucial powers vis-à-vis those who wish to gain advantages from government-driven projects. The economic primacy of the state is anchored in the constitution, with Article 33 mandating leaders to control natural resources and key “production branches”. Different presidents have interpreted this mandate differently, but Widodo decided to give state-owned enterprises (SOEs) a prominent role in his infrastructure plans. Between 2013 (the year before Widodo took office) and 2017, the assets of nine major infrastructure-oriented SOEs—airport operators Angkasa Pura I & II, the state’s five largest construction companies, toll road operator Jasa Marga, and railway company Kereta Api Indonesia—increased by 262 percent, from Rp 119 trillion (US$8.5 billion) to Rp 432.5 trillion (US$30.8 billion) (Guild 2019). These companies, which function as the main channels of state funds into the market, are encouraged to work with private investors, often through suppliers and contractors (Ramalan 2021). During the pandemic, the state’s role in the economy expanded further. The government exceeded the traditional budget deficit ceiling of 3 percent to pump money into the suffering economy (in 2020, the budget deficit was 6 percent). Thus, oligarchs have strong incentives to gain the ear of the president when the state plans large-scale infrastructure projects managed through SOEs or when it flushes the market with emergency liquidity.
Presidents have also used their power to offer protection to non-indigenous oligarchs in exchange for support and donations. In 2016, the Forbes list of the fifty richest Indonesians featured forty-four ethnic Chinese, holding 87.4 percent of the combined wealth of these top fifty tycoons (US$86.42 billion out of US$98.825 billion) (Forbes 2016). One ethnic Indian is also on the list—with his wealth added, non-indigenous oligarchs hold 92.5 percent of the total wealth owned by the fifty richest entrepreneurs. In a country with a long history of anti-Chinese and other ethnic violence, these oligarchs are used to paying political patrons for protection (Chong 2015). Suharto had masterfully used this paradigm to exploit the wealth of his ethnic Chinese backers while perpetuating the social discrimination that forced them to offer funds to him (Borsuk and Chng 2014). But even after democratization began and some of the formal discriminations of ethnic Chinese were lifted (especially by President Wahid between 1999 and 2001), non-indigenous oligarchs remain aware of their vulnerability. The mass demonstrations against Purnama, the ethnic Chinese governor of Jakarta, in 2016 and 2017 saw persistent ethnic stereotyping of wealthier Chinese Indonesians. Purnama, it was alleged, was the proxy of Jakarta’s ethnic Chinese oligarchs (the so-called nine dragons), who were—in turn—seen as Beijing’s agents (Rezkisari 2016). Opinion surveys confirmed the existence of these sentiments in society at large (Mietzner and Muhtadi 2019), cementing the anxieties of non-indigenous oligarchs and their urgently felt need to turn to the president for protection.
At the same time, presidents have not hesitated to use their oversight of law enforcement agencies to exert pressure on oligarchs, both indigenous and non-indigenous. As in the case of local government heads, threats of legal investigations have been weaponized to bring politically hostile oligarchs into line. One of the most blatant cases in this regard has been that of Hary Tanoesoedibjo, an ethnic Chinese, the head of the Perindo party, and the country’s leading media tycoon. In the 2014 elections, Tanoesoedibjo’s stations supported Prabowo, giving the latter an advantage (Tapsell 2017). But in early 2017, investigators opened a case against Tanoesoedibjo for threatening a prosecutor through text messages. Shortly afterwards, Tanoesoedibjo announced that he would abandon Prabowo and support Widodo’s re-election, which was widely interpreted as his attempt to stop the investigations (Retaduari 2017). Whatever his intentions, the case did not make it to court—and in Widodo’s second term, Tanoesoedibjo’s daughter was made deputy minister for tourism and the creative economy (because her father’s party did not pass the parliamentary threshold, it was not given a full cabinet seat). Through maneuvering by the legal apparatus, then, Widodo’s government had turned an oligarchic foe into an ally and gained access to his massively influential television network. As discussed below, similar tactics were used in the case of Bakrie, whose marginalization helped Widodo to transform his initial minority position in parliament into a supermajority.
The president’s appointment powers, as applied in the case of Tanoesoedibjo’s daughter, are of great interest to other oligarchs, too. Presidents have routinely filled some of the non-party (and party-affiliated) cabinet seats with oligarchs, incentivizing those who want to be considered for an appointment to demonstrate support for the president. While oligarchs in cabinet must formally relinquish control over their businesses, there are often reasonable doubts about whether they did. In most cases, the chairpersonship of the conglomerate in question is handed to a family member or a close business associate, with the oligarchs transitioning into a position of power that allows them to shape a beneficial environment for their businesses.3 It has been common for oligarchs to be directly put in charge of the business sector in which their businesses operate. Luhut, for instance, controlled the Coordinating Ministry for Maritime Affairs and Resources after 2016—an institution with the Ministry of Energy and Minerals under it. Moreover, Luhut held the latter ministry for some time in 2016. Similarly, Chairul Tanjung, head of a vast conglomerate, and worth an estimated US$4 billion, was appointed coordinating minister for the economy by Yudhoyono in 2014 (his predecessor, Hatta Radjasa, had interests in the oil business, which was also under his coordination at that time). Thus, ministries are an important avenue for oligarchs to secure both their interests and those of big business as a collective, giving much value to the cabinet seats that the president can distribute.
When earlier discussing the president’s power over parties, we emphasized that in Indonesia’s post-2004 regime of direct elections, presidents possess decisive capital that party leaders lack: that is, electoral popularity. The same is true for the president’s advantage over oligarchs. There has been no shortage of oligarchs who have sought the presidency for themselves but have failed because of their poor standing with voters. Surya Paloh, Tanoesoedibjo, Bakrie, Jusuf Kalla, and others openly declared their presidential ambitions, but few were nominated to run, let alone had a chance in the actual election (Hadi 2011). For all the funds oligarchs have invested in electoral machines, they found that nationwide popularity in presidential races is not purchasable. Facing the same dilemma as unpopular party leaders, the only option for oligarchs who wish to participate in frontline politics is to attach themselves to a popular non-oligarchic politician, such as Yudhoyono and Widodo. Even for oligarchs who prefer to remain in the background, the popularity of presidents and presidential candidates is the key motivation to support them. Said one leading opinion pollster, “oligarchs are some of our best customers. They want to know who is going to win, because that determines how much they give to each candidate” (confidential interview, online, December 1, 2021). In short, presidents’ electoral attractiveness is a form of social capital that some oligarchs wish they had and others seek to align with for strategic business purposes.
It is therefore misleading to portray Indonesian presidents as weaklings under the control of oligarchic paymasters. Winters (2013, 15), for instance, described Widodo’s rise as an “oligarchic move in which the power of wealth placed [Widodo] before the voters.” While there is no doubt that some oligarchs supported Widodo’s candidacy, it is equally self-evident that many other tycoons wanted that slot for themselves. However, they eventually had to accept Widodo’s electoral superiority, which tells us much about the relationship between oligarchs and presidents in Indonesia. Of comparable importance are the other powers presidents can mobilize in their negotiations with oligarchs, ranging from their regulatory authority to their role in the state economy and influence over law enforcement apparatuses. Consequently, the interaction between oligarchs and presidents is a more complex affair than oligarchy theorists often imply. Hadiz and Robison (2014) partly conceded this point by stating that Widodo “has displayed considerable acumen in negotiating within established elite structures.” But for them, this was just further evidence that he was “embedded in the system of oligarchy.” By contrast, the following section demonstrates how Indonesian presidents have managed oligarchs with the same instruments of coalitional presidentialism through which other actors have been integrated into broad presidential alliances.
Presidents and Oligarchs
To assess how post-2004 presidents have managed oligarchs as part of their coalitions, we begin by analyzing how Suharto dealt with them. Significant differences and similarities emerge from this analysis. One of Suharto’s main mechanisms to discipline oligarchs and extract resources from them was holding group meetings, sometimes publicly. In March 1990, for instance, he famously assembled the country’s leading tycoons, almost all ethnic Chinese, to his ranch in Tapos and called on them to “share their wealth” with cooperatives. (In practice, this meant sharing their wealth with him so that he could redistribute it.) Such meetings would also occur before every election, with Suharto telling tycoons that “We must make sure that Golkar wins. For that I will ask Lim Sioe Liong [Suharto’s chief crony] to ask donations from you” (Borsuk and Chng 215, 5).4 Liong was then in charge of deciding who should donate how much (because he knew how much they were worth) and collected the money, too. Aside from these gatherings with oligarchs as a collective, Suharto would also meet separately with them in private. Liong’s visits to the palace or Suharto’s home at Cendana Street in Jakarta, often in sandals and shorts, were legendary. Suharto did not mind the occasional publicity of the meetings in Tapos and elsewhere because it conveyed to the citizenry that he forced the oligarchs to share their riches, and because it increased the sense of vulnerability among the oligarchs, especially those of non-indigenous backgrounds. This sense of vulnerability—in turn—drove the donations up.
But Suharto drew a clear line between his milking of the oligarchs and their formal participation in politics. Oligarchs paid Suharto so that they could operate in his polity and obtain commercial advantages, not to become ministers or political leaders themselves. This reflected the narrow politico-economic power structures in the fully Suharto-centric New Order. Thus, the incentives for oligarchs to seek direct political participation were lower under Suharto than in today’s competitive, multi-layered system. Indeed, Suharto’s cabinets created oligarchs rather than accommodating them. In putting together his ministry, Suharto tended to hand economic ministries to Western-educated technocrats, who used their offices to build connections that helped them and their offspring launch business careers. The economist Sumitro Djojohadikusumo, for instance, was a Suharto minister from 1968 and 1978, establishing networks that allowed one of his sons, Prabowo, to marry Suharto’s daughter and another, Hashim, to become a successful businessman. Hartarto Sastrosoenarto, minister between 1983 and 1999, saw his son Airlangga become a medium-level oligarch and, under Widodo, chairman of Golkar. Similarly, Ginandjar Kartasasmita collected considerable wealth during his time as minister between 1978 and 1988, with his son Agus Gumiwang subsequently entering both business and politics to eventually emerge as a Widodo minister. Only once did Suharto put an established oligarch into his cabinet: Bob Hasan, also a member of his family, became a minister in Suharto’s last ministry, which was widely seen as a sign of his desperation and distrust of anyone outside of his inner circle.
By contrast, the oligarchs’ involvement in post-2004 presidential coalitions is more direct, formal, and institutionalized. Private meetings between presidents and oligarchs continue, both to extract donations and to ensure their support for government policies. But oligarchs are now visible and even prominent actors in public politics, demonstrating their increased ambition to be both sponsors and active drivers of policymaking. Presidents, too, have dropped any attempt to hide the influence of oligarchs on their governments. Quite to the contrary, oligarchs have been proudly displayed in cabinet. Inclusion in the ministry line-up, then, has been a key instrument of coalitional presidentialism through which heads of state have tied oligarchs to their government. As noted in chapter 1, oligarchs (party-affiliated and independent) have seen the most consistent gradual increase in their cabinet participation of all surveyed groups. In fact, because table 1.1 only captures the situation at the beginning of each president’s term, it misses the even stronger increase in oligarchic cabinet participation in the second Widodo administration achieved through the reshuffle of December 2020. Of the six new appointments, three were multi-millionaires: Sandiaga Uno, with a wealth of about half a billion dollars; banker Budi Gunadi Sadikin, with about US$15 million; and Sakti Wahyu Trenggono, with about US$190 million. One newspaper even calculated that Uno’s net worth increased by about US$19 million on the day of his appointment through an increase in the value of his stock (Citradi 2020).
The 2020 additions to Widodo’s cabinet joined an impressive concentration of minister-cum-oligarchs. Partly this was because Widodo, as a small-scale businessman, believed that wealth was an indicator of success and competence. Of course, Widodo’s 2014 campaign presented him as a man of the people, and he portrayed the elite as unable to understand the social realities that he could grasp. However, Widodo believed that “we need to appreciate the entrepreneurs; they know how to do things. They don’t just talk. They have success, so we need to allow them to contribute to government” (interview, Jakarta, September 15, 2014). Based on this principle, Widodo recruited Erick Thohir into government in 2019. While Thohir reported a net worth of “only” US$200 million, his stock investments seem to go much further than that (at one point, he bought Italian soccer club Inter Milan).5 Widodo, after using Thohir as head of his 2019 campaign team, made him minister of state-owned enterprises—a portfolio in which the SOEs under his coordination both competed and interacted with his firms (and those of his brother Garibaldi, whom Forbes estimated to be worth US$1.65 billion in 2020). Similarly, Widodo made Nadiem Makarim, the founder of the ride application Gojek, minister of education in 2019. Makarim reported a wealth of about US$100 million, while his company was estimated to be worth US$5 billion. As a symbol of innovation, Makarim was expected to break through the antiquated education bureaucracy. Yet, he was soon embroiled in accusations of a conflict of interest because his ministry’s schools used Gojek’s digital payment arm to collect contributions from parents (Saeno 2020).
In addition to direct ministerial appointments, presidents have used party channels to integrate oligarchs into their coalitions without them sitting at the cabinet table. Some oligarchs want to avoid the trouble of having to nominally transfer their companies to others and submit a state officials’ wealth report, and thus prefer to participate in coalition politics through their parties. Surya Paloh, for instance, the chair of Nasdem and a media tycoon, opted to give the allocated cabinet seats for his party to other cadres he could control. Paloh began his political career in Golkar, unsuccessfully contesting its presidential nomination in 2004 and the party chairmanship in 2009. He subsequently established Nasdem, still hoping to win the presidency one day. But he recognized the rise of Widodo in 2013 and 2014, and was one of the first party leaders to throw his support behind him. Exercising influence through his membership in the informal council of party chairs in the coalition, he focused on expanding his businesses beyond his media empire, which owns the television station Metro TV and the daily newspaper Media Indonesia. In the oil sector, he cooperated with China Sonangol, a joint venture between Angola’s state-owned oil company, Sonangol E.P., and Hong Kong-based company New Bright International. Once Widodo became president, Paloh invited China Sonangol officials to meet with Widodo to negotiate a deal to import oil from Angola. The import went ahead, although Widodo later complained to aides about “how pushy” Paloh was (confidential interview, Jakarta, October 25, 2019). In the 2020 Forbes list of the 100 richest Indonesians, Paloh was estimated to be worth US$440 million (VOI 2021).
Apart from cabinet and party forums, oligarchs have also entered presidential coalitions through other institutions. One important body in this regard is the Council of Advisers to the President (DPP). While not possessing strong formal powers, membership on the council gives its holder proximity to the president and significant prestige with which to open doors in the state bureaucracy. Of the nine DPP members appointed in 2019, five could be categorized as oligarchs: Tahir, worth US$3.3 billion; Arifin Panigoro, with assets of US$550 million; Wiranto, valued at about US$50 million; Putri Kuswisnuwardhani, the heir to a cosmetics empire, estimated to be worth about US$30 million; and Muhamad Mardiono, who reported a wealth of around US$100 million. At least two other members were millionaires. The absence of ordinary citizens on the council—who could give the president advice from the perspective of workers, farmers, or other professionals from lower social strata—is striking and highlights the importance presidents have given to accommodating oligarchs into their government infrastructure. The lack of public protest toward this overrepresentation of oligarchs in state institutions also demonstrates how normalized the role of the wealthy in presidential coalitions has become.
Other institutional mechanisms designed to involve oligarchs in government and policymaking have focused on Kadin, HIPMI, and Apindo. Individually and through these organizations, oligarchs have been asked to participate formally in critical legislative initiatives. One example was the drafting of the Omnibus Bill, which deregulated important sectors of the economy and reduced workers’ benefits as well as environmental protections. For the drafting process, the government established a Task Force in December 2019, which was jointly headed by Kadin chair Rosan Roeslani, worth US$450 million, and Airlangga Hartarto as coordinating minister of the economy (himself worth at least US$8 million but also the owner of several companies before taking up the ministry). As members, the Task Force included James Riady, the son of one of the country’s wealthiest oligarchs with assets of US$1.4 billion, and Erwin Aksa, a former HIPMI chairman and associated with the Bosawa Group run by Jusuf Kalla’s family (Aziz 2019). Airlangga and major oligarchs, then, oversaw the drafting of legislation that cut labor costs for their companies and watered down environmental regulations that they had long viewed as a nuisance. It would be inaccurate to assume, however, that the oligarchs had imposed this agenda on Widodo. By all accounts, he was a passionate defender of the initiative, believing that it would generate the money necessary to pay for his infrastructure projects (and help recover from COVID-19). As noted, he viewed oligarchs as experts in the field of economic policy, as evidenced by their wealth, and thus their wealth accumulation strategies deserved adoption by the state.
Finally, presidents have built ties to oligarchs through private and family business links. Suharto was the master in this field, but this practice has continued under the democratic polity. The benefits of such ties are compelling: they directly merge the interests of the oligarchs with those of the president and generate income for members of the presidential family. Widodo had already formed ties to oligarchs as mayor of Solo, when he entered into a furniture joint venture with Luhut in 2007. But under his presidency his two sons, Gibran and Kaesang, established businesses that leading oligarchs found advantageous to support. In 2019, Gibran and Kaesang helped founding GK Hebat, a company primarily operating in the food business. Also involved in the company were Theodore Permadi Rachmat, an oligarch worth US$1.6 billion, and Gandi Sulistiyanto, a major official of the multi-billion dollar Sinar Mas Group (Salam 2020). In 2021, Erick Thohir, the SOE minister, also developed a business with Kaesang (at that point, Gibran, the president’s oldest son, had already become mayor of Solo and thus had to be more careful about overt business activities). Together, they bought shares in a Solo soccer club, with Erick holding 20 percent and Kaesang 40 percent (Sholikah 2021). It was not reported who paid for the shares, and how much they were worth. But for Erick, the business connection consolidated his relationship with the president, and for Widodo, it tied a key oligarch even more strongly to his administration. For Kaesang, it was part of a rapid increase in his wealth: in late 2021, the then twenty-six-year-old paid US$7 million for a share in another company, leading to public speculations about the source of his funding and affluence (Muhardianto 2021).
But business opportunities for their families is not the only thing presidents receive in exchange for integrating oligarchs into their coalitions. More importantly, oligarchs provide essential campaign donations and other funding. While much of Indonesia’s political funding is off the books, even the official reports give us some clues. In 2019, two golfing clubs donated about Rp 40 billion (or US$2.9 million) to Widodo. However, research by the Indonesian Corruption Watch (ICW) showed that the likely donor behind these clubs was Wahyu Sakti Trenggono, then the treasurer of the president’s campaign (who was later rewarded with a ministry) (Widowati 2019). Similarly, Prabowo’s campaign aides protested that Widodo had donated Rp 19.5 billion to his own campaign, when the president’s wealth report only acknowledged possession of Rp 6 billion in cash reserves (Paat 2019). It is not implausible to assume, therefore, that the self-donation was raised through other sources. It is also likely that Erick Thohir, the head of the campaign, covered his own expenses and that of his campaign team. A second benefit presidents receive from oligarchs in return for granting them privileges is positive TV coverage of the government. In 2019, most of Indonesia’s private television stations and other media outlets sided with the president (much in contrast to 2014, when the majority backed Prabowo). In the 2019 campaign, stations owned by Paloh, Tanoesoedibjo, Bakrie, Thohir, and others offered Widodo largely uncritical and officious coverage, contributing to the fact that the president was able to secure re-election comfortably (Souisa 2019).
More generally, the accommodation of oligarchs by presidents as part of their coalition purchases them the tycoons’ support of, or at least acquiescence toward, the government’s operations. Whenever Indonesian presidents face public demonstrations, for instance, speculation is rife that particular oligarchs sponsored these protests. While proof is often sketchy, and such an approach overlooks the agency of many of the protesters involved, there is little doubt that oligarchic sponsorship of demonstrations exists and that presidents and their aides firmly believe in its possibility. In October 2020, for instance, Airlangga claimed that protests by labor unions against his Omnibus Bill had been sponsored. “Actually, we know who paid for and was a sponsor of these actions,” the coordinating minister said then, without elaborating (Ainurrahman 2020). In this context, integrating members of the oligarchic class into the government offers the prospect of limiting the number of actors who have the resources and will to sabotage presidential administrations, promising greater stability.
Overall, the oligarchs’ participation in presidential coalitions is a transactional arrangement in which presidents gain personal financial security, political funds, positive media coverage, and acceptance of their rule, while oligarchs obtain cabinet positions, policy influence, and privileged access to business projects. This arrangement is managed formally and informally, with presidents engaging oligarchs privately and through organizations such as Kadin, HIPMI, and Apindo. We already noted, in the case of Tanoesoedibjo, that the president possesses various instruments to punish and reward oligarchs in order to secure the functionality of their coalition membership as a mutually beneficial proposition. When Tanoesoedibjo opposed the government, he was first punished by the legal apparatus under the president’s authority, and subsequently rewarded with a post of deputy minister for his daughter when the oligarch changed course. In the next section, we look in more detail at another case that illustrates how exactly presidents manage oligarchs, and what can happen to some of them when they try, for whatever reason, to stand outside of the president’s coalition.
Oligarchic Inclusion and Exclusion: Bakrie
The case of Aburizal Bakrie illustrates both the political opportunities and limitations of Indonesian oligarchs. While Bakrie’s wealth allowed him to mingle with state elites and protect his businesses, his biggest dream—the presidency—remained unfulfilled. Ultimately, he even found himself at the margins of elite politics. In the early 1970s, Bakrie had joined his father’s company, helping to turn it into a large conglomerate (Robison 1986, 332). In his business career, he leaned on New Order ministers such as Ginandjar Kartasasmita, who privileged Muslim entrepreneurs over their ethnic Chinese rivals (Winters 1996; Robison and Hadiz 2004, 85). When Bakrie’s businesses suffered large losses in 1998 (Robison and Rosser, 2000), they only survived thanks to a generous debt restructuring deal. Reportedly, Bakrie had to settle only 20 percent of his US$1.1 billion debt (Asia Sentinel 2008). Under the new democratic regime, Bakrie used his continued government connections—he was chairman of Kadin between 1994 and 2004—to gain access to lucrative coal mining licenses. With the price of coal quintupling between 2000 and 2008, Bakrie’s business flourished, and he decided to enter frontline politics. In 2004, he unsuccessfully sought Golkar’s presidential nomination, but then supported Yudhoyono’s bid (against the wishes of his party) and was rewarded with a ministry. Initially coordinating minister for the economy and then coordinating minister for people’s welfare, Bakrie’s businesses continued to prosper; in 2008, Globe Asia declared him Southeast Asia’s wealthiest oligarch, with a net worth of US$9.2 billion (Globe Asia 2008).
Among many other advantages, Bakrie’s inclusion in Yudhoyono’s cabinet protected him from major crises threatening his business interests. After one of Bakrie’s drilling companies was accused of causing a mud volcano in Sidoardjo (East Java) to erupt and flood more than 700 hectares of land in May 2006, the government did not make Bakrie fully liable for the damage. While Yudhoyono required Bakrie to buy the destroyed land for US$700 million, the government shouldered all other long-term costs. Furthermore, after global commodity prices dropped sharply in October 2008, Bakrie benefitted from the Jakarta stock exchange temporarily suspending the share trade of his company Bumi Resources. However, Finance Minister Sri Mulyani Indrawati overturned the decision, leading Bakrie’s shares to collapse (Kompas 2009). According to an economist who spoke to Bakrie then, “he was furious, and said Sri Mulyani had to go, that was non-negotiable” (confidential interview, Jakarta, May 6, 2010). After incessant attacks by Bakrie’s Golkar party—he became its leader in October 2009—Sri Mulyani resigned in May 2010. By then, Bakrie had been rescued by foreign banks, including a $1.9 billion loan from a Chinese sovereign wealth fund (Montlake 2011). Undoubtedly, Bakrie’s influence in government and party circles played a role in securing these loans. After another financial rescue in 2011, Bakrie—who gave up his ministries in 2009—decided it was time to begin another presidential campaign.
In his renewed bid for the presidency, Bakrie enjoyed the support of other oligarchs who wanted to prevent the political rise of Prabowo Subianto. As Yudhoyono was barred from running again in 2014, Indonesia’s oligarchs were looking for a new patron to back. For a variety of reasons, Prabowo seemed to be an unsafe bet—especially for ethnic Chinese tycoons (Prabowo had blamed them for the 1998 crisis) and military-affiliated oligarchs who had had conflicts with Prabowo in the past. Among the latter was Luhut, who established a unit in his business office to help Bakrie with his presidential campaign. “Bakrie isn’t perfect, but we can work with him,” Luhut said. “The most important thing is that he can challenge Prabowo” (interview, Jakarta, April 12, 2013). But Bakrie’s campaign struggled to take off. In 2012, his aides organized a safari for him, in which the Golkar chair toured parts of Indonesia in a luxurious bus to introduce himself to the electorate. The privileged candidate failed to connect with grassroots voters, however. In a speech at a West Java school in June 2012, Bakrie tried to convey that he had weathered many crises, saying that “when my businesses were down, I even had to fly economy class” (notes by the author, Karawang, June 13, 2012). Students and teachers, many of whom had never been on a plane, remained unimpressed; they only showed signs of satisfaction when Bakrie distributed computers to them. Other audiences were not enthusiastic either. As a result, Bakrie’s electability ratings remained stuck in the single digits: a month after his West Java tour, he polled at 4 percent (Dewi 2012).
Widodo’s emergence as the presidential frontrunner for 2014 killed off whatever chances Bakrie may have had. As Widodo took the lead in the polls by early 2013, many oligarchs shifted their support to the most likely winner. Luhut, too, despite having invested significantly in Bakrie’s campaign, abandoned Bakrie and began to back Widodo as the best alternative to Prabowo. “I like Bakrie, but this is politics. We need to get behind the nominee with the greatest chance against Prabowo, and that’s [Widodo],” Luhut explained (interview, Jakarta, November 9, 2013). Luhut felt that his furniture joint venture with Widodo gave him a special connection with the president-in-waiting, and he happily turned his pro-Bakrie campaign operation into a pro-Widodo machine. As for Bakrie, he found no parties other than his own to nominate him (Golkar needed partners to meet the nomination requirements). Watching Widodo and Prabowo firming as the only credible contenders, Bakrie overplayed his hand in negotiations with both candidates; he first asked Widodo to run as his (Bakrie’s) deputy, and then offered to Prabowo that he would settle for the latter’s vice presidential nomination (Asril 2014). Neither nominee showed interest, and after Widodo rejected a Bakrie request for a concrete promise of cabinet seats, the Golkar chairman ultimately aligned with Prabowo, even though he was not on the ticket. Bakrie’s television station TV One switched to heavily anti-Widodo coverage, and on election day, it published a manipulated count that falsely declared Prabowo the winner. In short, Bakrie had managed to maneuver himself out of the race and into a position of hostility to the incoming president.
Initially, Bakrie believed that he could take on Widodo. The coalition of parties that Prabowo had put together for his nomination held a majority in both the outgoing and incoming parliament, leading Bakrie to assume that Widodo would be a weak president. Before Widodo’s inauguration, the Prabowo coalition in the DPR demonstrated its power by abolishing direct elections for local government heads (as noted, Yudhoyono later reversed that move). Triumphantly, Bakrie said at the time that the coalition would go on to change “122 laws” that he deemed to be in violation of “Pancasila Democracy” (the term Suharto had used for his polity) (Wardi 2014). The first on his list were the mining, telecommunications, and banking laws—all directly related to his oligarchic interests. But Bakrie’s sense of superiority did not last long. When Bakrie was re-elected as Golkar chairman in December 2014, a pro-Widodo faction in the party split off, challenged the result of the party congress, held its own, and installed a new chairman, Agung Laksono. Recall that the Indonesian government has the authority to recognize the legality of each party’s leadership, and the Widodo administration used this power to endorse the pro-government Golkar board and reject Bakrie’s. Behind the scenes, the government also pressured Bakrie, exploiting his precarious financial position to threaten him with sanctions or reward him if he gave up his claim on the Golkar leadership. After trying to cling to his position throughout 2015, Bakrie surrendered by early 2016 and agreed to be replaced by a new chairman.
In return for making way for a pro-government Golkar leader, Bakrie was allowed to move into the party’s advisory board chairman position. This post held no executive authority but signaled to Bakrie that while he had been expelled from the inner circle of power, he was still considered part of the elite as long as he did not openly challenge the president. But this could not distract from the fact that by the second half of the 2010s, Bakrie was a shadow of his former self. He disappeared from the list of the 100 richest Indonesians—a list he once topped; many of the headlines he made related to protracted debt restructuring deals his company had to enter into (Hermansyah 2018); and he no longer mattered in the negotiations between party leaders over the big issues, whether in regards to coalition-building or policymaking. As mentioned, Widodo also cut short a brief attempt of the Bakrie family to stage a comeback in 2021: when Bakrie’s son Anindya ran for the chairmanship of Kadin, government agencies reportedly advised delegates not to vote for him. An ally of Widodo was elected instead. Replicating the approach used to marginalize his father, the government tolerated the inclusion of Anindya in Kadin’s advisory board. This ensured that the Bakrie family had no access to concrete instruments of power—but also kept it within the broader parameters of the regime.
Bakrie’s rise and fall demonstrate the limitations both oligarchs and presidents face when trying to contain each other. Oligarchs have immense powers that help them launch political careers, even if they are unpopular. But money alone is insufficient to lift them into the presidency—that, as Yudhoyono and Widodo showed, requires a genuine connection with the electorate. Similarly, oligarchs can create significant troubles for incumbent presidents, but the latter have strong instruments to respond to such challenges. Once Bakrie had openly positioned himself against Widodo, the president succeeded in politically neutralizing him. Yet Widodo’s victory over Bakrie—and how he achieved it—also highlight the constraints of presidents’ counter-oligarchic measures. Widodo battled Bakrie not because he was an oligarch, or because he had tried to defend his vested interests in politics. Rather, Widodo decided to sideline Bakrie because he was an opponent of the government. Other oligarchs in Widodo’s circle were treated with none of the hostility that Bakrie was confronted with; on the contrary, their share of cabinet positions increased under Widodo. Consequently, while presidents have the means to contain and remove individual oligarchs who have chosen to oppose them, they have been reluctant to use these weapons to challenge oligarchy as a whole. For presidents, oligarchs who support them are not only tolerable but also useful. By the same token, “bad” oligarchs are not defined by their potentially corrupt insertion of business interests into state affairs—but rather by their stance vis-à-vis the president. Put differently, the checks presidents have placed on oligarchs have been partisan and fragmentary.
Discussing the state of political funding in Indonesia, Yudhoyono told this author that “Prabowo has trillions of Rupiah, [Bakrie] has trillions of Rupiah, Mrs Mega[wati] has many entrepreneurs as friends, … but where can I get money from?” (interview, Cikeas, December 2, 2014). Yudhoyono’s complaint gives a telling insight into the mindset of Indonesian presidents when justifying their interaction with oligarchs. They see themselves surrounded by competitors with a lot of money, and the only way to create a level playing field with politicians-cum-oligarchs is to access oligarchic funds themselves. To some extent, that is an accurate perception. But it is also true that neither Yudhoyono nor Widodo took action during their presidencies to reform the political arena they were operating in. Asked why during his rule the amount of state subsidies to political parties was reduced by almost 90 percent, Yudhoyono said that he could not remember, but that he now favored higher subsidies. Widodo, as incoming president, said he would raise the state subsidies to their pre-2005 levels—which he did in 2017 (interview, Jakarta, September 15, 2014). However, it was clear to everyone that after twelve years of general inflation and rising political expenditures, such a re-adjustment to the old level would not be enough to significantly alter Indonesia’s system of funding politics. At the same time, presidents possess crucial legislative and executive powers to shape political institutions, and have used them to advance issues they considered important. Apparently, the reform of the political financing system was not among those issues. Instead, both Yudhoyono and Widodo perpetuated, and even expanded, the regime they complained about.
The reason for the presidents’ perpetuation of the status quo was that situating oligarchs as members of their coalitions, even if they lacked party connections or any other institutional power, was a matter of political convenience. It is obvious that any president, regardless of the country or system he or she operates in, has to decide how to handle oligarchic actors and their vested interests. Politicians need money to operate, and a certain degree of dependence on donors is thus a logical consequence. But Yudhoyono and Widodo institutionalized this dependence and viewed it as a normal element of political coalition-building rather than as a defect to overcome. Taking on the oligarchic class as a collective would have, in Yudhoyono’s political thinking, created “chaos” and damaged the polity. Widodo initially campaigned against this approach in 2014, but quickly learned to appreciate it after taking office. Accordingly, both picked loyalist oligarchs to support them and pre-empt any oligarchic destabilization attempt. When they moved to punish an oligarch, it was almost invariably for disloyalty toward them, not corruptive behavior. We noted earlier how pleased Widodo was with Setya Novanto as chairman of the DPR, in the full knowledge of the latter’s track record that stretched back deep into the New Order. In Novanto’s case, what mattered was that he delivered useful services and therefore contributed to the stability of the Widodo presidency. Similarly, when the much-praised Finance Minister Sri Mulyani offered her resignation in 2010 to escape the continuous confrontation with Bakrie, Yudhoyono accepted it immediately. For him, the resignation helped to reduce the “chaos” he so dreaded.
The damage this pre-emptive accommodation of the oligarchs in Indonesia’s coalitional presidentialism has done to the polity’s democratic posture is self-evident. While oligarchs have largely refrained from sabotaging presidents and therefore helped to avoid the impeachments and presidential resignations so common in Latin America and other regions, their acquiescence has been bought with concessions that eat away at Indonesia’s democratic quality. Oligarchic ministers pursue their business interests while in office; sponsors to parties and candidates can expect projects and policy favors; and ordinary Indonesians have increasingly been excluded from an electoral system fueled by oligarchic resources. The most disillusioning aspect of these trends is that Yudhoyono and Widodo accepted them as normal. Their acceptance, moreover, did not come after a long battle with oligarchic interests that they eventually lost, resulting in a truce with their opponents. Rather, Yudhoyono—despite his protestations of being victimized by oligarchs around him—saw the inclusion of oligarchs in his alliance as a part of his overall political strategy of keeping the polity calm, and Widodo gave up on his early anti-oligarchic promises only a few weeks into his presidency. Consequently, both presidents used their presidential powers for other purposes than to contain the influence of oligarchic actors on them and politics more broadly. Primarily, they deployed their instruments of power to enforce discipline among participating members of their coalitions, including the oligarchs, and control those actors trying to oppose them.
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